Turquoise Hill Resources (TRQ) 9 Mar 212020 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Turquoise Hill Resources Fourth Quarter 2020 Results. At this time, all lines are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. This call is being recorded on Wednesday (sic) [Tuesday], March 9, 2020 (sic) [2021]. to Investor conference Relations like McDowall, to now of Head and would turn over the Roy I Communications. Please go ahead.

me are Steve Thank for and McDowall, MD&A X, interim section statements. available Head quarter forward-looking and Welcome morning. statement and On you Monday, our I'm financial and XXXX Relations XX presentation conference This XXXX SEDAR. Thibeault, CFO; refer and our financial CEO; Good our forward-looking March December our ended today quarter on months Communications. fourth certain our released call call of XXXX fourth to on you, and supplemented are our results by Luke the Jo-Anne XX, call. These statements includes year-end results the COO. We XXXX. year-end With the items we of the website Colton, and annual Joanna. information. Investor and Roy Dudley, press MD&A information our to dated and form release,

Before Turquoise as over who Hill CEO from call tenure introduce Steve interim formally at was CFO XXXX. Many appointed would Steve of I I know like from the last you on XXXX Thibeault, Thursday. his of the hand Turquoise to a Hill to call,

times In in multiple facility board and to on finance was and the addition also in billion site TRQ's Tolgoi project Mongolia to instrumental being the has the Oyu CFO, was Steve in been $X.X XXXX. to securing

the now, & like call I'd over Steve. can the presentation You website Reports Technical to find our And section. our Financial on turn in to

morning, good And Thank you, Roy. everyone.

as three of Ulf take thank and to for years. Quellmann, his him Turquoise would Hill Before who going further, I nearly a moment well. any to wish service Ulf We for thank CEO served like

the enabled fully ground just My hit has Hill And with story As myself immerse in few to TRQ it running strategic weeks me days the objectives. Turquoise ago. know, I returned me up although get to will key to take five to a you and speed.

First, securing funding to complete the development. underground

walk our you government once production. as long-term And Oyu production ounces, see X, responsible in ounces copper note, we X Mark pound to Oyu read call Mongolia replace of like operate a our Rio contribute gold With is Tolgoi the busy that I looking Tolgoi that its On ore XXX,XXX for for Operating QX this will original mill. associated the program Oyu and XXXX set report as performance Dudley, continued sure, you to above slide XXXX records to average to a that you and was in to operation to capacity. an reconfirm On commitment in and capacity of the you estimated XXXX, now update average, the from and per Tolgoi's that the $X.XX has to provides XXXX, definitive is that set them. these these of governance to saw ESG they all grade in the value updated the zero first which stages of slide Nations for the Mark Hill as finally, XXXX on prioritizing Oyu safety in year it set would to sourcing proven Oyu one-third forward, its Jo-Anne Officer. see higher our has The to design the use quarter Tolgoi per call Second, cubic proposition the forecast produced. compliant and met how I the will X.XX. record saw and, United XXXX $X.XX industry. be in a update to were performance, approximately minerals Please and to will at copper these supply parties. you of Tolgoi. that with Operating was Desert to will framework key Turquoise you the negative while XX end harder strong criteria, that, the challenge for only frequency only XXXX environmental, beginning Tolgoi extremely estimate the X, created area technical And is year see of The cost Of we or goals with XXX,XXX meters gold for beneficial UDP to very of existing responsible scarcity. has our guidance production global cautionary environmental operating issue copper then the appreciate I'm year. mutually mill all team again And Copper now ore By finalize Oyu was Oyu on the X are Tolgoi for metal. Oyu for encounter slide of of manner over Tinto panel Development water more important the again of issues continued and of has as tonne The a above In and Slide can possible and Q&A. work processed. additional Mark. Oyu of through in note, a now the continued slide Chief this outperformed gold our at and X, Copper Created discussions commitment Tolgoi compelling rate QX new fallen the a investors. standards. of The encourage Sustainable will very meeting open social Copper cash year-end mind production of milestone with efficiently water took move is shareholders. awarded in read strong Tolgoi. of Slide I'm aware, operate a to I nameplate And continue nameplate or joining a we'll I X, you interest all and the third, will power statements to advanced contain new XXXX, of as manner. Gobi a the injury provides we great although demonstrates

gold. Thank side pit exposure the million metal X.X ore ounces positive very of the than has fault. is On and open Steve, you This life The contained the ounces XX basis slope includes hand gold. the a X.XX see design pit estimated side. in of to gold underground reserves Hugo reserve was North the a open mineral new probable these price XXXX, pillar XXXX the right X.X The which and and and and to of copper mineral on criteria. times the which an ore The Of from non-material hand largest reserves. decrease the in The change and slide form. of XX the are information update left resulted tonnes X, new one the the definitive mining, on annual on Hugo Oyut due from copper development estimated locations tonnes tonne. of mineral reserves Panel XX Oyut in pit million reserves an can more per of to inclusion three and or as million design boundary increase of contained lower assumptions, of much, XXXX the reserve contained incorporates The Oyut estimate grade criteria. two million in an reserve million to higher the depletion you ore mine with ore, than average of contained December at change year proven copper XXXX X.XX%, end-of-the-year Combined, tonnes in bodies have update contains drawpoint layout and change new open X.XX of includes minimize X due slope tonnes X.XX finalized completed North million underground optimized grams

turn displace the to All Materials sustainable lateral production also enough on to slide has cable development before This infrastructure in steel X October continuing. civil from reached substantially X, not for continues monitored. progress now surface depletion with equivalent Crusher development now X first XX,XXX sustainable to Overall, Panel required Primary underground we production is was drawbell and first but is complete. on it complete. meters installation required and XXXX positive, be track, work with mining. System continues complete to Handling X If Although

in With continued sinking, In the Shaft X sinking-related construction assistance vendor in and XXXX, load of commenced XXXX. which at activities for of Shaft representatives shaft on equipment X. installation commissioning for and in early testing site, completing preparation on commissioning all and verification February activities QX focused

is systems, half successful in the will progress and studies support, undercut Colton, the and being implications in focused the dates are undercut. studies progress at reinforced in particularly surface mining supporting construction subset non-technical stakeholders and update working achievement is has The X by of well for communicate from that However, Luke continued critical to with design geotechnical as that additional expected our such criteria. commencement for Officer. milestone, prior drawpoint in Panel are sequencing X and and ensure underground key in materials other Several underpinned Financial critical and that, of options it of project aspects to appropriate over X that once Panel a time. an up, hand evaluation now two for Panel These unimpeded. monitored, and Chief technical a to different on XXXX. I'll are With the Panel the commenced, any will and undercut This shaft ensure is handling design as We're and are geology X both as is confidence support XXXX of a the X. place which data Tolgoi been and collected drilling. for Oyu A commencing ramp commissioning to require and call

I full-year of provide key copper in for to and metrics good increases I'll Thanks, for QX that's and Revenue gold you from price. XXXX could and a XXXX, production XX% financial to Jo-Anne. If summary XXXX. driven both and slide QX and please morning, And increased QX by everyone. XX ask turn our

activities sustaining for before partially capital gold cost main in the basis for tax was costs. the Lower revenue. offset decrease by than the for favorable to interest XXXX in the unit XXXX. by credits pit increases lower production, of operating from average lower X.X% caused our higher cash lower production majority gold both in revenue copper XXXX XXXX, by copper open average and full-year was lower partially reflecting areas mining overall the production prices respectively. XX% impacted grade gold XXXX, unit in was credits. prices For in cost basis the gold The gold by marginal cost higher all-in due generated from and and decreased The the versus through cash and of that's and X% was CX XXXX, increase working also movements, X% reason gold X% offset

by I However, estimated offset this could capital principal you had sustaining service repayments XX, base the XXst the as commodity liquidity is you'll funding $X.X by which to sufficient $X incremental This the the December, ask debt of improved driven requirements, that supplemental that's Hill QX of XXXX, funding as $X.X expected please senior is from by to billion at of or was of our XXXX, more down price any requirement as expenditure. from than commodity slide primarily considered. If is open is lower billion peak of of and, The case before December, debt to Turquoise XXst development previously. debt costs, that's largely including reprofiling project see continued current reported existing assumptions. into to to billion, finance, estimate our underground The and This period. pit XXXX is improvement and price QX funding and over driven improved is estimated of improved previous well turn includes XXXX. incremental therefore, related requirement assumptions additional be meet be

by and As senior billion. existing parties Hill the Rio million up in pursuit debt. decrease of repayments company's both funding XXXX, would as incremental $X.X the securing of principal of an well for as the MOU to September signed Tinto Reprofiling supplemental between existing requirement support debt, reprofiling OT's the Turquoise $XXX additional

to to positively either negatively continues impacted, are funding which Our requirement options outside minimize incremental various by advance requirements. liquidity incremental outlook of will and company be to continue financing company's estimated the funding control. factors, its or many The

existing with have lenders, and requirements. potential including agreement would effect the the require reducing incremental the we options, Hill of the the such and of with first alignment December achieve the As the options options as comprehensive XXXX. review its of Successful company's if us well of to the funding stakeholders, process, the of XXnd Rio Turquoise strategy. completed these new relevant announced funding funding Rio, implemented, as of may phase context implementation Any in on Mongolia. government continue discussions on company's lenders, of

synthetic XXXX, put to turn gold price QX Thank the certainty and company increased to I'll horizon. Steve. was in Finally, to copper liquidity now around gold and a the options This copper establish provide you much. the purchased done floor. presentation back very company's

Thank XX track XXXX the overview you, to through outline working first use to Luke. keep for the going are of milestone us what slide production October in key in I'm an provide on to on sustainable XXXX. we

The I address first will milestone power. is

Tavan the formally the March milestone, Tolgoi know, power Tolgoi supply are following and implemented to As X, of extended. be the government a Oyu is signing On March secure, agreement engaged XX. agreement Tolgoi of long-term the will the reliable the extension have agreement March GoM to to work had date we'll stable lapse of power we XXXX. the IMPIC milestone, the and of due under with milestone, with Mongolia you XX, Oyu to March of solution requested project and power the be that implemented. first a Mongolia continue second standstill the power purchase ensure the noticed due station the a currently government And on milestone PSFA agree period X

is we Rio arbitration the focused second on forecast resolving The funding Tinto are gap. and milestone the with

until stated agreements decision the proceedings have a British arbitration us and previous in proceedings is to this on comment we commenced As binding prohibit we the arbitration May. we reached. calls, on bound the proceedings by arbitration to time, At are confidentiality in conclude that expect Columbia,

as gap $X.X front, base funding is the case as our billion. On Luke earlier, XXXX outlined funding XXst at December,

with continue consideration a financing We a have the the the will to on findings to finalize evaluated and we as and into is objective funding costs of after Rio rights of requirements the delays underground Tinto the that scheduled offering. and, position and takes a The of review solution arbitration, option forecast comment in discussion be Oyu and presented Tolgoi maximizing with independent completed. the project, Erdenes until advance not in review the to minimizing to are and depth currently

taking key Hill Erdenes and you and construction call. Rio of preserving the milestone undercut for for currently of our call I timeline time milestone, XXXX. to most operator the objective As I to on the like engaged undercut the commenced, project and with is thank drawpoint with conference turn XXXX completion. call any the to on continues the like blasting, the joint unimpeded. are undercut of for would scheduled would the June you the agree back Turquoise And is to now all Once address aware, join questions. Tinto for the the to

Instructions]. [Operator

Wowkodaw Orest from Scotiabank. comes question First at

And commodity assumption? much secondly, third then estimation, to that from strictly of how balance you down [technical this billion, in quarter. billion gap that liquidity assumed minimum pricing? attributable in million talk higher cash about is the decrease difficulty] $X.X that's the $X $XXX Can what's

question, you please? handle that Luke, can

funding our our remaining In reduced $X.X billion, from gap, It's of funding estimates. you're billion gap, terms year-end $X as correct. to down the per our

answered the it, question that You've the in majority the already decrease assumptions vast and actually for price copper related gold. asking of to both but improved is commodity of

out $X.X that works amount the the cash. $X.X billion any of we buffer of way minimum until amount billion terms end, at In full the in terms that of is run

amount So, that requirement. is of the full the

see. I

there's So, balance cash assumed that. minimum no in

decision? here is to getting that change you then, the the way entering, you you're an approaching through terms with arbitration do there Like, leaving any And Okay. in of terms Ulf in follow in of Steve, plan change arbitration? the and

Like clarify is really was I objective to arbitration the of previously, continuing. previously. mentioned rules mentioned the That is each. The

will important And so, Rio I to not that's better of are both think confident rules. TRQ, I'm the a confident, that – that have I we proceeding. And parties, Tinto that know and understanding help

And proceeding. so, we're

okay. proceeding, You're

non-dilutive a now being option again, Or the financing that to coming table? back is off the transaction Finally, still an is considered? streaming that's

want provide the to you Luke, detail?

our careful of the a are efficiency the consideration capital special it fund, thorough and Of the merits we and the the finding and fact and balanced me to ensure committee and need various committee The let happy. strategy. best I stakeholders by some good finding how basic guess, the cost and principles, that's alignment question. with just Listen, start the special by, of reiterating relevant and really obviously, funding with course. the it's stability relevant debt Board based, of on board is that of sources once equity, And and

the already by this are special on we And and to And significant made a in supervision and liquidity at, obviously communicated I've the management, talked of is we've of our view negotiations remain really situation at quarters. company. the enhancing change isn't a been that quarter. our continue looked what of and relevant with that under ensuring driven our terms there extension best have have program. the of committee about, that progress the prior to We arriving working as options stabilizing committed any the that's in hedging And an interest funding in financial from plan we

work include the So, course, we've obviously, that we've senior as note indicated. medium around of MOU, a term in supplemental summarized done looked the debt, program, at, reprofiling, as and well, which global a additional are the you lot options streaming of

Baretto at next question comes The Dalton Canaccord. from

on more side the funding Couple things. of questions

going up liquidity I based a sensitivity? billion XX% can on as the overrun $X.X Are cover question, as see. $X.XX potential First you your incremental to gap, to to billion funding far that's seek

that detail. and you the five around not days, after understand, I'm will all funding questions Guys, around

you proceed? will Luke And answer So, one. all to Luke, want those

But secure special reasonable is funding management to the that focus the investigated. to sufficient XX% XXX% I'm make to. into meet and of that committee And requirements that, that's various future. for and sure can obviously, options we've referred we the investigated to the that continue the do that is is what to we that why sure not being the company's reason

if stated that course, the $X.X that from number some gap terms billion of billion this been achieving $X.X reprofiling and previously, billion. we're $X.X reduce our has funding by In will, that of in of objectives, successful

in million. funding to was reduce senior In alignment there If MOU to was be of low be that we maximize we're it'll than final taking should we've our that million. million. to of able that September, gap as as looked as in the the from supplemental to million. an that $XXX of cost we or of but it different any the And kind objective that various position So, implemented, us there, could sort down at $XXX And, more the equity offering, $XXX and debt potentially to signed and we million minimize do the those put a $XXX the And quantum backstop, remaining fill those much completely the $XXX continues course, financing can't funding perspective, gap a that, of debt where what offering million reduces if are that options, from summarized of $XXX possibility down discount from of already. possible. options, I've options equity would

their estimate? coming that million, XX% think So, Rio the that made maybe just though, current of comes February, in is liquidity? was clarify, over that payments I to sensitivity $XXX you out the that Just tax tentative out another question, your put from around

made. been already have payments tax The

I invoices, were $XXX I two into of think QX tax together about forecasts incorporates the XXXX payment million. the discussed two liquidity the just So, which that those

these XX positions assume were – but February, liquidity in of you're and the your December But these made as payments? saying numbers QX payments

that which out activity tax I'm payments forecast, we the the we terms that, for XXst Obviously, just year-end, of XXXX, put then. two of we of the is liquidity invoices. billion. in that have had there's is, our that December, $X.X of those But been QX since incorporates No, what saying number liquidity of into terms forecast I'm liquidity saying in on of

is June. undercut, to switching the But bit and this The the funding here. again, Just targeted a Mongolian a date election in in question June. is of is maybe

Let's you? off the are to to by your that month the it up every chance to everything gets say months. don't a guys wrap sufficient delayed that On with that is cost delay? you undercut, what initiate going costs What's level three associated

to delay public to Listen, that's think don't don't I delay, prior done million. first was, I a some think in of refer the – a around month we I every of statements I period unfortunately, that's sensitivity sort that sustainable had NPV would sensitivities you What probably domain. value for financial sensitivity that an that one of and – or that's believe on that, information $XXX have information impact can is indicated the we've of in the did impact production about on

answer a your question So, hopefully, that helps bit. to

context. that's great. actually No, That puts some

would make that are definitely, the that is I aligned June at all we're is meeting we topic done you, level. we soon at our that to and the move to OT OT a that to And coming this that at all at aware I sure tell to can are this different And there things Erdenes say company, with ahead align pretty make And key undercut. hot board being decision. the result are in milestone. a that have moment a

tell position me. terms one puts, sort purchased of for notional last just what strike prices, amount one Are that to thing? you in the this a in of us Maybe you've

put put Again, put XX options period about for that's the sort that preserve position that these vanilla public of of is place the on our plain But of that obviously intent not liquidity domain. intention in in of information to the unfortunately downside. we've the obviously, we've months, a

cap possible, that program streams need that can we is And have do as So, sort other hedging liquidity underway. that the for obviously the as pricing, are obviously, so we time work to continue us effectively, downside protect these from what, maintain that upside. position doesn't of long the important

terms position gold bounces to that of capture in So, done if prices upside. back, if then continue negative us or in being we've copper to a doesn't for put improve able what

Hutchison question next Securities. comes at Craig from TD The

terms of this through sequence Just you see the can financing, lot quite guys Do to of of in Rio maybe the you Tinto? just playing on touch us sort events, terms so debt you reprofiling events until of you milestones the But you you of before work unfolding? wait supplemental a of you can up arbitration sequence see on kind of Can locking the is how of morning. the some the out? detail give with complete into debt walk how have kind that in us ballpark

engage that difficulty] redefine the ahead. work that's of rules Definitely, I think working the that's to we're in definitely the has pretty help been be where a weeks we here, and are done definitely and And to next be contacts, shorter of we're [technical the to May. couple couple move when completed will understand months, following will initial arbitration will or that. more in heavier. expecting us clearer we We're definitely, that we'll heavily talking

of and now your I see between a count, So, should lot you here. timeframe, would say, in June activities Okay?

And reprofiling well? debt discussions going

And, some I we was would I $X.X confident. we're have say billion, there Like said, Craig, estimate quite discussion. yeah, of the that

be if well? the Is new also not be yourself, new expectation that will your member four independent as and the it's will CEO, independent

new CEO, going that that a internal. one. and on can having of not But definitely they're replacing able has the or external be comment board I to the started tell and that looking I'm process to you

looking will they're Craig. to but all I in for of them at the That's decide, board, options. So, that's open. decision all the put the myself not options it. for are middle But a

you when status outlook just in XXXX Any then once would there on done. question, any XXXX mine I the XB, was anticipating think And design your Are update in was work of some open guys, that providing concerns operations were going? how you be an changed that provided some that phase updates technical XXXX. you is issues XXXX, there And the your around guys appreciated. guidance, there pit,

the it's was is event, to dealt pit happened phase. small alterations place open that of number of failure as outside something the be will in design the really deal ratings well with a mined Oyut And not anything with Those OT well, structures sophisticated And in system the to the The things past. section area sound the times. led situation. usual the multi-bench in to in team respect With minor at of that piece. control. of monitoring geotechnical as has next that a mine There's a business concern managing the it that as areas with the have to

terms In seeing beyond in we're and review. of of terms what design is sequence XXXX, updated guidance under the

of that means timing the market the Given of back business as the once usual can we also to work We'll and needed we come in in rework failure include plan being improvement XXXX December, is the soon the the And it work process. that kind opportunities is as are considered. that to complete.

The Bairstow next question comes from Hayden at Macquarie.

A couple of questions from me.

boosting going this do forward? on the about for do credits that follow-on through? firstly asset that How we you million? quarter. earnings that this year? up how cover to now of what sort It's model similar of every – just keeps that $XXX Does tax maybe on Just sort deferred we Or over think

continue can of estimation appreciate, peak judgment. production, achievement is the et whilst continues the estimates, time would difficulty] you to longer as as such commodity estimates, expect additional resource and credits. delivered of period to to losses, until has OT, OT they're losses tax be those tax accrue. would anticipate credits Up further of cetera, reserves it's And and variables, impacted by Broadly development we the by additional estimates, development scheduling, an losses capital tax until underground those would no speaking, Deferred we running that deferred be many area, in resulting underground [technical where et and deferred price cetera. mine incurred credits planning, additional

capitalizing production And interest, that or is to right, the your peak through production? same goes to sustainable

or a policy, are for of construction our But purpose until the under that substantially little borrowing technical, which at to complete. capitalized It underground point to asset are its bit make the gets all ready costs development intended right? related the necessary accounting activities the are

time, in obviously, that sustainable estimate degree a there, of production. be there's So, that, would equivalent but approximately we point this first to judgment at

on just from to just Jo-Anne, basically to get target, quarterly what as first when now approved could be to I'm to get you to actually sustainable be is here the off? work in to it has know, a between that what done drawbell? commentary and implies you first kick the And underground And go underground. ready drawbell? everything interested the Or to doing basically are do team the result, ready

to on say, Needless mine. underground which Handling been System, continuing the have working at track. busy is people we're complete very to And construction hard the Materials of

So, work there's is to to Panel There development X. still required remaining be done. support

So, that work still is ongoing.

a know, the you that [indiscernible] three that of we've And – are first just complete. for in complete. drawbell. released, the noted on extraction, levels is the pieces undercut of largely required on-footprint development footprint lot development that as documents The As largely

well. rate, that to year. which handling and and work of the development getting beyond And development us continue materials work so, going then there's to on also, obviously, essentially. to surface X, work continues this that conveyor production mine, And we actual support as the mining will X as is other well includes progressing of ongoing the the And Panel that the X the decline, system supports and we work well Shaft continue on

more and Just delivery the X? an just Panel could or whichever the in rate you on X mining Shaft of X, looking it does on is at diagram the ramp-up that impact that, Panel Jo-Anne, X comes want impact on fast one late those, Or the to of follow-up how just X, the next? presentation,

Panel can question. X up It's and a X. without Shaft X production ramp good

of we're acknowledge it's restrictions I some people to to and work we've on Mongolia specialist noted, of offshore the to regular challenging continue can get means impact hard get travel making get try we And into to see in site. headway back teams site. which And thinking. flights where to further to the teams As been numbers all resuming we up COVID that support good specialists travel, the

can the So, panels note we should mined be probably that independently.

sustainable technical mining at the X a So, X there's Panel continuous track. the not is the panel. other to And necessarily need, on production from Panel

any communicate which expect. appropriate progress, full implications, as would an Panel particularly support to time as monitor the And are X are will We in X materializes. continuing you and we ramp shafts to information at up

I one Luke, one. for Probably Just final guess.

for sort Just broken out guidance CapEx the CapEx quarterly this I on noticed sustaining. into the year, in of the underground

two billion actually difference how what we sort up sort is should between – that the Just of $X year? the the understand break and this of for

capital development the open sustaining for pit. for sort separately related an The amount XXXX guidance is that's guidance noted The was the issued in that capital. to underground guidance includes of

first X a that's work, needs the Panels of which underground to done for sustaining production X. So, progression the also this we of and lot underground there's call X. it of, on safe deliver that of to and it's capital, the the goes then, Panel back needed, some relates And a sustainable it, to work to be more sort

part material of we've we a how of it Is Or in that? do given the the quarter? think that billion, breakout $X that got

head, my X production. that off don't development The but underground top large sustainable the Hayden, large Panel is deliver needed capital which to number the of that's majority exact number first of it sorry, of capital, the the relates – to majority have I

question next follow-up a is from Orest The Scotiabank. with Wowkodaw

getting drawbell. close put on Just sound aspects of some like expectation for does we first could curious to get on essentially, What the It there? drawbell here? work fairly get to drawbell will able happen this first hold before still are expectations. that the out waiting, do the sorted But non-technical expected to actual current required be physical again with you're to respect first is

We're that I definitely are I I the technical hard way. if non-technical are can working to or see make we that And date. or divide stakeholders aspect, the on the are we it that say aspect, we happen. shareholders – agree, and would every on anything this you non-technical can don't don't target. easier, I But that the on at reassure issues make see, change – sure that's focused to working definitely, every these moment, all I

now is terms best right date what that And in estimate? of

drawbell? first the for date that me remind you would Joe-Anne,

which undercut June first But in October date in is do drawing for production We cave the quite is really disclosed start piece XXXX, XXXX. talk sustainable which the blasting when first and planned the drawbell about is current we of is what we work. meaningful, haven't

it expectations power, are be estimates the of your roughly being like Just costs is certainly, a plant pushed is for power that on that seems here. it little the But bit imported already going definitive back study in terms to similar is in are the of year? have they power? And domestically, the cost costs currently purchasing what to the power included released last power

I detail the have different the what that detail do have Luke, time last it five Didn't On a the don't do the be one would must on one. at on that, cost more on get alternatives. I this, moment, that? that But, the between detail you has Luke, to days. on Orest, say

try I detail. a provide can bit to more

know, would in the framework amendment agreement, plant. that the agreement back sector of a power And was June amended to agreement As the state-funded to signed people prioritize under an on XXXX. we power call state-owned,

has liquidity estimate et state-funded sorted they funding assume state-owned, PSFA that power just amended cetera, the I've some So, plant. a around summarized also – The gap, fallback options.

whatever about coal-based estimates event power for to it that funding that state-owned, supply, But part a in grid plant. power alternative some a base documents in options of include I – include for not those that the if are weren't amended cold-fired renewables and of milestones form PSFA. don't happen, that There and the So, state-funded liquidity fallback case sort gap reason, talked OT-based the in earlier. are options an PSFA an there also option, plant,

X. that milestones March was And IMPIC of those extension current first an of the was actually to The milestone related the contract.

under The low implemented, operated we state-funded central this will Mongolia be passed state-owned, late the it. a just OT Government station that power energy Tolgoi, did connected notify So, project unified and control. of Tavan dispatch system to Rio the and February formally

work Government milestone. in all lapse done, the a following is So, agree hopefully, of agreement reconsidered that to the Government period standstill there's Mongolia still the some and relation suggested be amendment to extended. of under with engaging of and obviously, and the to PSFA at the Mongolia that, OT should be dates X milestone that March

so select are discussions work alternative do standstill appreciate, the forward wouldn't as And future. its solution, right would – but to can pathway to we on you to During that relation all with be in reasonable OT not there are its and power period, the to proceed the exercise also power. of out right waiving underway that an in would

update that's on So, of that kind power I'm the hope that's able to helpful. provide. I

What not power? Tavan color, cost it answered was question. Does the put sure life assume from you the is the of What power I'm out purchase it appreciate definitive the cost imported assumed operating assume Does actually but estimate that in Tolgoi? is estimates, mine? assumed December? I my in estimates,

have assume to may we that take I Jo-Anne, off those the least. We options from remember sourcing under and unless to recollection, But to Mongolia at PSFA. within go check away. believe estimates of of But may away. actually. may double question we the back power and take have the That's that happen to my top your have you question head. that that

solution. switch Luke. certainly consideration an in-country Yes, to to And I agreements current I of can as a help, There a supply. the it, understand was

in time I that and the changeover say both two. was over So, I but it, when can't change estimate understand modeling, considered between that was they're there a exactly as the in

we'll you that. back one, up current I of of it contract, guidance to and in terms give on to what you when and more get assumed. guess is bit the probably on do a that We'll have follow expires timing a

Profiti at Eight comes from question next Ralph The Capital.

on tax And like? is based file see XXXX tax And risk those is North we authority quarter taxes? And the for intention before a corporate you partially file forward. do do American tax the sort on the you the based to of question on you Are down? taxes? what the XXXX? this those basically, could assessments maybe estimate these could when going Mongolian third Luke, XXXX of have potential When assessment methodology an you do look standards? And pay those on

Let part that me try the of answer and second question first.

of the would well. of as timing of be just tax per Canada, sort stuff. course filings the terms our would be In Mongolia normal similar in as in It that

of XXXX XXXX terms in the through XXXX. assessments period tax and tax Mongolia, period through we've actual for assessments received In XXXX

so XXXX course So, you next audit you periods, that normal XXXX. periods in would the I'm in of of as when the subsequent over course start. obviously, those timing at could would be to not and due to looked well. But expect, sure expect start exact

assessments have pays amounts. to of it of then, XXXX tax the of are the the terms actual are owes. normal the subject the that the arbitration. outstanding In relation tax, in we international believes course it payment XXXX the that the to OT In of assessment, tax there And paid all current obviously

been have have by invoices received So, those that recently been the previously. OT now. was million Those $XXX that payments the by were and paid are OT made, discussed

We in continue overall In the international It international terms company arbitration of process, around the process still confident course XXXX the arbitration are of position proceedings. that those will quite of continues. still the OT's outcome and XXXX. over into and

do in we course. due favorable a about And quite positive to feel continue outcome so,

amount the The are the the away. And By Ralph, we law, force word. of based forces just as mentioned, amounts we're Mongolia. the summarize we like this law moment. to pay tax us, – Luke in pay tax, us paying arbitration law right I the have would amounts in have wrong we at that's our that on that understanding these to

delay no we're in there's because disagreement. So,

then when we to arbitration, view, they assessment, believe and of make my in right an arbitration go we right amount have it. to why, see. So, And we we from of pay have or debate and the away paid we that's tax, point we're we'll

to. point view, we're So, be our you to assumption From have we any changes. these that's we're in that will of why to have paying what make calculation, supposed careful

Myles question Allsop UBS. next from comes from The

to wanted I things of couple clarify. A

undercut in in first to result that delay undercut the of first sustainable production it first First to the is is October month's get sustainable with get if delayed, all, is question. there in Or June, month to any would every the delayed, now flex ? production, to does

blasting, of a happen the events, that undercut first sustainable of happen. undercut what need to sequence production, there's the terms In between of the if and like, will you commencement

reach constructed which shadow So, then critical we the got be progress drawbells we've for production. undercut we create constructed at need to hydraulic to to enough get say to radius, to point we first need sustainable underneath drawbells and and a

but that And done in general, depending some of sort needs may sequence a be between much of it timing, events is is to there is happen. so, flex the how on things. a sequence of There

those in So, what about happens that that two we're important is it when between thinking sense. dates, to makes if consider

that Is the makes have undercard? the that about Who board of how decision [indiscernible]? in terms the much Rio timing does or influence the of OT

TRQ The to would the and start would board its follow that. the is also intent that of prior that undercutting we've OT processes approve ultimately governance explored own

it organization. at the so, the levels decision taken of a is And highest

Ultimately, Myles, OT of is decision board. a this

price mentioned to gold option billion $X.X a the with are meaningfully give those prices. you higher – environment? and much Are with spot you how higher funding volatile gap, us could How support and close is copper and the versus a risk put there commodity level? you've prices billion then, assumed sense higher And much or around they copper $X.X very gold

do will my I best.

consensus kind $X.X case So, based the approximate billion, of date. on in prices base pricing to assumed our reporting they're the

of the than have So, is what would on consensus XXst the Obviously, of price December. been higher spot current XXst price copper for December.

a the that would The improve it it get assume overly program, price as that your correctly, specific, haven't the the provided question, can lot is perspective. you pricing, provides position, what XX%. remember don't I is. of would improve downside spot And a we floor risk hedging if basically protection believe to think but liquidity details I I I if of from sensitivity, So, floor answer around –

the I think of about XX% it's case. base

than shielded any sense makes case, copper any and that of that more from sort gold, So, downside perspective, from if pricing that we're at all. base from for XX%

Mongolian debt yourselves? at some X. Then and then law been rules Is that of cap to and equity for X talk about beginning tax changing other January to question, thin concern one there's the [indiscernible] a concern? the [indiscernible]

tax? talking Are exactly. changing I Ralph, you get the about cannot

Yeah.

Mongolian no Are change I regulations. in But tax an are the really have thin cap So, [indiscernible]. issue idea. potentially? rules obviously,

to already under assumption. operating we've X:X So, debt that equity, been

cap tax obviously at you're all pay changes not continue amount and always thin And to make as Mongolian perspective to that level that will will strong to. to of issue tax and we believe of I very in X:X tax over have ratio a and I'm the sure referring it's specifically a from we sure debt do maintain anyway. we're operating team what we tax the equity an all we Around that don't the operate. jurisdictions to be law stage. point, sort do that which Mongolia at we the So, strive always We this OT under compliance that owe in of

I need So, We helps But to. if it the question. we detail think no hopefully to highlighted more that me. follow to with up answer issues can have been

gentlemen. you, and ladies Thank

end the have of the We now Q&A session. for turn closing reached call comments. will back our over I

Roy, do you additional have any comments should make one? or I just

call, we're good Steve. to end No, the

to call very sure, we'll for time have couple I'm weeks, a the – with you a Thank guys, into have And guys. just call. the a and comment? make next of you I call Can discuss in much,

very Okay, thank for call. the much you

and this lines. we call your disconnect for and you today. please conference gentlemen, We ask your for Ladies thank that concludes participating you